US Composite PMI Hits Five-Year High of 58.4 as Supply Bottlenecks Push Input Prices to 66.4

US business activity accelerated to a more than five-year high in September, with S&P Global's flash Composite PMI Output Index rising to 58.4 from 56.0 in August — the strongest reading since July 2021, the firm said on Sept. 23. The surge, driven by new orders climbing to 58.2, signals the economy is expanding at roughly a 5% annualized rate, consistent with the Atlanta Fed's 5.1% GDP tracking estimate. The economy grew just 1.5% in the April-June quarter. Strong demand is straining supply chains, largely due to the seventh month of the US-Israeli war with Iran. The prices-paid index jumped to 66.4, the highest since October 2022, from 59.9 in August, with record diesel costs set to add further pressure. Companies reported increasing difficulty finding suitable staff. Chicago Fed President Austan Goolsbee said supply shocks are proving persistent, with evidence that strong demand is compounding the problem. The Federal Reserve last week raised its benchmark rate by 25 basis points to 3.75%-4.00% and flagged more hikes ahead.